Market Watch: Dow futures contract fell by 75 points or 0.2%, while S&P 500 futures dropped by 9 points or 0.2%, and Nasdaq 100 futures fell by 60 points or 0.3%.
Netflix beats net subscriber expectations but issues cautious revenue guidance. Trump accepts Republican nomination, and Wall Street faces sectorial rotation.
Netflix earnings
Netflix’s third-quarter revenue guidance fell short of expectations, despite better-than-expected second-quarter results and strong subscriber additions.
The company reported earnings of $4.88 a share on revenue of $9.56 billion, topping estimates of $4.74. Netflix also added 8 million users in the quarter.
However, the company’s revenue guidance fell short of $9.81 billion and its advertising business would not become a primary driver of revenue growth until at least 2026.
Donald Trump has accepted his nomination
Donald Trump has accepted his nomination as the Republican Party’s presidential candidate, paving the way for a potential rematch with Joe Biden, who won the 2020 elections.
Trump’s popularity surged following the assassination attempt, while Biden faced increasing calls from Democratic party members and donors.
 Crowdstrike, Microsoft suffers major outages
Cybersecurity firm CrowdStrike has experienced a major outage globally, affecting businesses and causing at least two low-cost US airlines to ground flights.
Microsoft reported an outage in its Azure cloud computing platform, attributed to a configuration change causing connectivity failures.
Microsoft’s 365 service also experienced degradation, causing users to be unable to access several apps and services. Both companies are rolling back their latest updates globally.
Economic Calendar
- 10:40 AMÂ Fed’s Williams Speech
- 01:00 PMÂ Baker-Hughes Rig Count
- 01:00 PMÂ Fed’s Bostic Speech
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Recent data indicating a possible cooling in the U.S. economy have alleviated some persistent inflation concerns, fueling hopes that the Federal Reserve will start to bring interest rates down from more than two-decade highs as soon as September. Along with the Dow, the benchmark and tech-heavytouched record marks last week.
The durability of the strength on Wall Street will likely be tested by a fresh batch of corporate results this week, including quarterly returns from artificial intelligence darling Nvidia (see below). Durable goods and consumer sentiment data will also be in focus as markets hunt for more evidence that growth is moderating enough to give the Fed justification for rolling out rate cuts this year.
Recent data indicating a possible cooling in the U.S. economy have alleviated some persistent inflation concerns, fueling hopes that the Federal Reserve will start to bring interest rates down from more than two-decade highs as soon as September. Along with the Dow,
The durability of the strength on Wall Street will likely be tested by a fresh batch of corporate results this week, including quarterly returns from artificial intelligence darling Nvidia (see below). Durable goods and consumer sentiment data will also be in focus as markets hunt for more evidence that growth is moderating enough to give the Fed justification for rolling out rate cuts this year.
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MFitch Ratings has downgraded China’s credit rating outlook to “Negative” from “Stable” due to concerns over growing public debt and slowing growth in the world’s second-largest economy. The agency affirmed China’s rating at A+, citing increasing risks to China’s public finance outlook. Concerns over slowing economic growth have grown in recent months, with Fitch expecting gross domestic product growth to fall to 4.5% in 2024.
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U.S. inflation data for February is expected to provide insights into the future direction of Federal Reserve monetary policy. The overall consumer price index (CPI) is expected to match the previous month’s pace of 3.1% annually, with the core CPI expected to slow to 3.7% from 3.9% in January. However, the month-on-month gauge is expected to shed light on price gains momentum.
Fed officials have made cooling inflation the main objective of interest rate hikes, which have brought borrowing costs to over two-decade highs. They suggest cuts may be coming later this year, but need more evidence that price growth is sustainablely easing back down to their 2% annualized target. Analysts at ING believe inflation is likely too hot for comfort.
U.S. inflation data for February is expected to provide insights into the future direction of Federal Reserve monetary policy. The overall consumer price index (CPI) is expected to match the previous month’s pace of 3.1% annually, with the core CPI expected to slow to 3.7% from 3.9% in January. However, the month-on-month gauge is expected to shed light on price gains momentum.
Fed officials have made cooling inflation the main objective of interest rate hikes, which have brought borrowing costs to over two-decade highs. They suggest cuts may be coming later this year, but need more evidence that price growth is sustainablely easing back down to their 2% annualized target. Analysts at ING believe inflation is likely too hot for comfort.